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Reader Mailbag: Does Via Meadia Give Oil Companies A Pass?

A reader wonders,

How about the oil industry which receives vastly more subsidy through the tax system than wind energy receives. Does that industry deserve those subsidies after more than a century of operation? Perhaps the oil companies should also be billed directly for aspects of their operations like the cost of maintaining the Fifth Fleet in the Persian Gulf since 1944 to assure their access to cheap and plentiful supply of crude oil. Subsidies come in all forms. The mature industries are just better at hiding theirs.

At Via Meadia we generally oppose corporate welfare of all kinds: ag subsidies, oil subsidies, green subsidies, you name it.  We think that the country needs a flatter tax system: lower tax rates for all income brackets and all types of taxes (corporate, individual, capital gains) and fewer deductions.

But green subsidies have a worse track record than other kinds, we think. The environmental movement is unusually gullible and easily snookered. Corporate interests put green lipstick on a pig like ethanol (which is actually worse for the environment than traditional fossil fuels) and too many greens squeal with excitement and whoop it through. High speed rail, ethanol, electric cars, and many forms of support for solar and wind power aren’t just generically bad policy as subsidies; because greens are such bad policy mavens, these programs are often more wasteful, destructive and counterproductive than some other stupid things that we do.

Anyway, if you think subsidies are generally a bad idea—and we do—the best time to oppose a subsidy is when it is still young and weak. The longer these things last, the more entrenched they get in the economic structure and the political process. Killing green subsidies while they are young and relatively feeble, while working on tax reform that will ultimately reduce the old and established ones, strikes us as the most sensible approach.

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